(Parliamentary Under Secretary
of State ( Ministry of Defence): I am pleased to place in
the Library of the House this year’s financial summary of the
Defence Equipment Plan. This is the seventh consecutive annual
publication of the equipment plan summary, and presents our plans
to deliver the equipment needed by our Armed Forces to defend the
country and keep our people safe. The Government is committed to
meeting the NATO target to spend 2% of GDP on defence and at least
20% of that spending on equipment. This report sets out our plans
to spend £186 billion on equipment in the 10-years from 2018/19.
We have substantially revised the content of this report to make
it more transparent and accessible. For the first time, we have
set out the strategic context for the Equipment Plan and
presented in detail the Department’s assessment of the
affordability of the Plan. The NAO has assessed our plans and we
are grateful to them for their report which is also published
today.
In 2017/18 the Department achieved several notable milestones in
procurement and support of equipment and successfully delivered
the plan within budget. Looking ahead, there are significant
financial pressures we must manage in the Equipment Plan. Our
central estimate for the cost of the Equipment Plan at April 2018
exceeded the allocated budget by an average of 3.7% over the
10-years from 2018/19. The shortfall is greatest in the four
years from 2018/19. This forecast will vary as risks and
opportunities materialise and project plans mature or are changed
through management action.
The Department secured £1 billion additional funding in the
Autumn budget, which will help reduce the risk to affordability
until 2020 and allow the Department to continue delivering
existing plans for Joint Force 2025 and to modernise some key
capability areas.
We are also taking steps to improve management of the Plan and
enable longer term affordability. The Modernising Defence
Programme was launched to further strengthen and modernise UK
defence and the Armed Forces and put UK defence onto an
enduringly affordable footing for the future. This work involves
rigorously pursuing productivity and efficiency gains as well as
prioritising capabilities to meet the changing threat
environment. It will reshape the content of the Equipment Plan
and improve the way in which it is managed. We will report on the
implications for the Equipment Plan in subsequent financial
summary reports.
